Bond-fuelled lending to support near-term growth but challenges remain unaddressed
Crown Group CEO Iwan Sunito turned a love of drawing and desire to own his own business into a property development empire spanning Australia, Singapore and Indonesia. The group has $3.5 billion of projects in the development pipeline in Australia and Asia. He talks to Anna Fenech.
Crown Group CEO Iwan Sunito talks to Private Word Editor Anna Fenech about his career journey.
Before moving to Australia as a teenager, I was naturally attracted to drawing and, while I was at high school in East Java I spent time with my grandfather who was in the antique Chinese furniture making business, which is very traditional, precise, detailed work. In 1984, I moved to Australia and completed my final year of high school at Randwick TAFE. My results gave me the choice of an aeronautical engineering or architecture degree. While it was a hard decision, architecture not only offered me the opportunity to work for myself, but to start small and build something from the ground up.
I struggled in the early years of my degree with both design and theory (involving philosophy) elements, so much so I was ready to quit! Then in year four, I had a lecturer by the name of John Gamble who changed everything. He made me question my motives for becoming an architect. He made me understand that to be a really good architect I must understand the ‘why’ or end goal of a building project, not just the part I was responsible for. I started studying hard and got high distinctions.
I earned my Masters in Construction in 1992. Doing the Masters helped me to understand more about the impact of economics and government policy and gave me a much deeper understanding of property development. My thinking was opened up beyond the very narrow prism of ‘I just want to be an architect and every property developer is bad, cruel and nasty’. A successful development business needs great architecture and vice versa.
In 1994 I set up my own architecture practice. As a uni student, I had already gained experience doing small private jobs for people like bathrooms, garages and a house in Rose Bay. The business grew rapidly but there were cash flow issues and elements of running a business which I was not really managing well. I had also started building a fund – which included money from family members – which totalled about $1 million but we could never find a development to fit it.
Then in 1996, I was looking at a potential development site in Bondi Junction which needed a $5 million capital injection. That’s when I called Paul Sathio and Anthony Sun. Paul is a civil engineer and already had 10 years’ experience building townhouse developments. We pooled our resources to fund and complete the job together. I didn’t have the money back then, and was fortunate that my father gave me $600,000 to take part in it. We finished the Bondi Junction project in 1998. We made a healthy profit and decided to continue working together.
That project setup became the foundation for Crown Group today. We have complementary skills including architectural design skills, marketing skills and building construction, development and global capital skills. Today, we specialise in high end, high rise developments close to railway stations and the CBD. We have about 120 staff and operations in Australia, Indonesia and Singapore.
One of our business goals is to become a global brand and for that, everything we work on must have iconic appeal. Therefore, we aim to design buildings that transcend time and region – so people from Asia, Australia, Europe and the US will respond to it. Think simple but dramatic – like the Sydney Opera House or Harbour Bridge.
So, our 25-storey Sydney by Crown development will feature heritage inspired lower levels transitioning to a modern glass and steel tower, capped with dozens of steel arches. The arches will envelope the tower’s rooftop bar and garden.
I think the design from our architect Koichi Takada is amazing. He’s an Australian architect of Japanese background. Our Green Square-based Crown Green Square development, to be launched in 2015, is also designed by him. That development will have a unique loop shape, and it will have music rooms, a theatre for residents and a ground floor auditorium.
Our expansion plan is to remain strong in residential development, with iconic architectural innovation, but we have also expanded into hotels and serviced apartments and we see great potential in a top quality serviced apartment business.
We are also exploring a listing of Crown Group in 2018 or 2019. We are yet to decide whether to list in Australia, Singapore or Hong Kong. We have employed a new staff member, Anthony Ryan, former head of JP Morgan’s Asian real estate division, to develop relationships with fund managers so they better understand our business.
A listing would not only help us raise capital for growth but allow us to give equity to valued staff. (Crown Group is currently a private company owned by my business partner Paul Sathio and I.)
I’ve learned that a punishment style of leadership is not as effective as coaching based leadership. A coaching system says everyone can grow their skills and confidence. Good leaders inspire people to perform well (without force) but are also good at the ‘how to’, that is, they know how to give meaningful instructions. They are not always the smartest but they make others feel comfortable (not intimidated) and not only inspire but enable the team to perform better than they themselves think they can.
I run a group event once a month aimed at mentoring young professional people and bring in industry leaders to speak. Guest speakers have included government ministers, CEOs, and ambassadors. I’ve had several great mentors myself so I know the value of it. The former chairman of Garuda , Robby Djohan, was a great mentor. We never did any business together but he spent time with me and guided me. I really relate to the saying: ‘It’s good to mix with great people but it’s even better to mix with people who see greatness in you’.
The former NSW Premier Bob Carr and the former Immigration Minister Phillip Ruddock have both personally inspired me to do more for the community. We also set up a Crown Group Foundation in 2011 into which $500 is donated for every apartment we sell.
My book, From Borneo to Bloomberg, which was published this year, is a book containing principles for success. It’s also a short life story about my journey from life in a small town in Indonesia to head of a leading private residential development company. It has become a bestseller in Indonesia where I visit three times a year.
This article was first published in Private Word magazine (Autumn 2015).
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